pk
Level 15
Level 15

Deductions & credits

@muralx , @Inugasuki , while generally agreeing with comments by my colleagues  @RalphH1  & @ThomasM125  for the type of cases  that you are considering viz:  

 

(a)  A US person ( citizen / GreenCard), with a foreign tax home;

(b) Having US sourced  passive income such as  Interest / Dividend / Barter Gain/loss ( capital or otherwise) /  supplemental incomes reported  on schedule -E;

(c) US and that foreign country having a tax treaty including the  " double taxation" clause

(d)  certain incomes are taxed by both US and that other country and actually taxed  by both countries under  in its own laws 

 

does require these US sourced incomes to be  "resourced by treaty"   -- {article Number  shown on the return/ form 1116).  The use of form 8833 in such cases in not required because  we are talking about individuals and not entities ( where disclosure of the underlying treaty assertions  etc. are  shown on form 8833).

 Note that  form 1116  , while recognizing the full amount of foreign income taxes paid/levied ,  limits the current year credit to the lower of  US tax liability on the income  and  an based on the ratio of foreign source income to world income.

 

Does this make sense  ?   Is there more I can do for you ?

 

pk